Event: the company achieved revenue of 641 million yuan in 15 years, an increase of 34.71% over the same period last year (the previous value was 26.44%), the net profit of shareholders belonging to the parent company was 126 million yuan, down 16.05% from the previous year (the previous value was 31.58%), and earnings per share was 0.66 yuan per share, down 15.38% from the same period last year.
The whole chain boosts revenue, and the business investment period is a drag on profits: 1) the company's revenue increased by 34.7% compared with the same period last year, which is higher than the average growth rate in the past three years, mainly because the company seized the warming market opportunity to increase more offline services while improving the ability to gather customers online, giving full play to the comprehensive service capacity of the whole chain, and the rapid growth of online marketing business such as Group Cube. 2) the company's net profit fell 16.1% compared with the same period last year, significantly lower than the average growth rate in the past three years, because businesses such as decorating treasure and Internet finance are still in the expansion period. The increase in investment in product research and development, product promotion and real estate marketing offline service projects led to poor profit performance.
The "31st" system set sail, and the four major businesses competed to develop: 1) the company actively built the "31st" system, that is, to clean out the room with "365".
Other platform-based services with "residence" as the core, Internet home services based on platforms such as "decorating treasures and robbing foremen", mobile life services based on "urban mobile matrix", plus financial services throughout the entire business chain mentioned above. 2) active layout of real estate O2O: the company has strengthened the integration of online and offline marketing services such as Group Cube, with emphasis on the extension of offline services, further enhancing the competitiveness of products, and further increasing the proportion of online marketing services such as Group Cube in total income, while investing in the establishment of 100 housing projects. 3) Home O2O strategy adjustment, directly facing C-end customers: the company's original home business provides decoration users with one-stop services from design to building materials purchase and decoration supervision through cooperation with offline professional decoration companies. however, during the reporting period, with the company's in-depth practice and understanding of Internet home services, the company adjusted the strategic direction of Xianbao business. To rely on Taofu platform to directly face C-end customers. 4) Internet financial business breakthrough, future growth is expected: the company's financial business annual revenue of about 5.1 million, accounting for 0.8% of the total, the scale is relatively small, successfully obtained the qualification of Internet science and technology small loans in Jiangsu Province. In the future, "Anjia loan", "love rent" and external cooperation with the Central Plains Group have opened up a new space for the development of the company's financial business.
The main business continues to have high gross margin and excellent financial situation: 1) High gross profit continues: the company's overall gross profit margin is 94%, of which the revenue of real estate online marketing services is 624 million yuan, an increase of 33.06% over the same period last year. The company began to develop Internet financial platform service business in the past 15 years, bringing it into the main business to achieve a revenue of 5 million yuan and a gross profit margin of 77.18%. Revenue in the Yangtze River Delta region reached 491 million yuan, an increase of 40.47% over the same period last year, with a gross profit margin of 94.58%, but the company's ROE during the reporting period was 14.82%, down 4.67pc from the same period last year. 2) healthy capital situation: the company's asset-liability ratio is 15.15%, which is higher than that of the same period last year. The company has sufficient funds, with cash flow of 144 million yuan in operating activities and nearly 800 million cash on hand. With the gradual development of new business, the company's profitability is expected to pick up. During the reporting period, the company is re-recognized as a high-tech enterprise and can enjoy a preferential enterprise income tax rate of 15% for three consecutive years.
Investment suggestion: the company actively lays out the "3x 1" system, the momentum of real estate O2O is good, the growth of Internet financial business is expected, the employee stock ownership plan continues to advance, and it will continue to benefit from the government's destocking policy in the future. With the emergence of the output effect of input, the company will enter a new round of growth trajectory. We expect the company's EPS to be 0.80,1.03,1.37 in 2016-2018. Corresponding to the current stock price PE multiple of 47.8X, 37.0X, 27.8X, maintain the "buy-A" rating, six-month target price of 50.15 yuan.
Risk hint: profits decline and new business performance falls short of expectations.